Rental property NOT on buy-to-let mortgage

magpiecottage

ShALLaX wrote: »

I suppose it's up to the bank as to what happens. As you're presumably in breach of contract in your current position, on the most extreme end of the scale, they may be able to terminate the mortgage and demand immediate repayment (unlikely).

As the loan is technically not a B2L at present, I think FOS would claim jurisdiction and take the view that the lender was only able to change the terms from the point at which it exercised the right to do so and not retrospectively.

They're more likely to chase you for arrears of what you should be paying on a BTL mortgage. Could you afford to pay up if they suddenly asked down the line?

For the reason I have stated, I do not think that FOS would permit that to happen.

The honest thing to do is to abide by the rules. You know what you are meant to do.

I agree with Holly. If the lender considers it important, it will contact you.


On the other hand, from its point of view, it has an existing loan with a good track record.

If it chooses to rock the boat then it risks you moving the loan elsewhere.

So it may actually be quite content to retain the status quo unless you volunteer to pay more!

Dave_Ham

rich_b70 wrote: »

Thanks for your replies. A real cross-section of opinions expressed.

We're still none the wiser though so if anyone reading this has been in a similar situation, or has a definitive answer, I'd be glad to read your view.

I also don't want to come across as coy, but I'd rather not mention the name of the provider.

Thanks again.

Too late buddy, the lenders have probably tracked your IP address and cross referencing to your mortgage as we speak - hope you signed in at work...!

Only kidding obviously, I feel you know the answer already. You can sit tight "unofficially" earning a few bob on the rental, or tell them and lose the rate.

There is no middle ground in my opinion. If they come after you in 2-3 years, I think they would be hard pushed to make you retrospectively repay the differential.

I suspect you will keep doing it, so if really worried save all of the profit into a second account.

All the best

stylus360

I had CTL on my Nationwide mortgage about 4 years ago, no mention of time scale, just keep payments up.

Thrugelmir

stylus360 wrote: »

I had CTL on my Nationwide mortgage about 4 years ago, no mention of time scale, just keep payments up.

Do you currently have a fixed term product?

angelsmomma

I am on consent to let with the Leeds but they upped my interest rate by 1% as well.I am still in a 3 year fix though.

They wrote again after 12 months asking me to pay another admin charge if I wanted to extend the consent to let for another 12 months.

I am now in the process of remortgaging on a buy to let.

olly300

If the lender gave you a consent to let and didn't mention a time limit in the letter then don't worry about it.

Lots of lenders didn't realise they could make more money by charging accidental landlords yearly for a consent to let.

jamesml

Dave_Ham wrote: »

I suspect you will keep doing it, so if really worried save all of the profit into a second account.

I would do this personally - check what you would be paying if you changed products and then save the difference. If they come back to you for it, you have it. If they don't, you've got a lump sum you either pay off the mortgage when you change products or use at your own discretion. Plus you are now used to paying the new rate anyway.

argomatt

I was on a Standard Variable Rate when I obtained Consent To Let from my lender. There were two different fees I could pay for this, a smaller one for 1 years consent, and a higher for ongoing consent.
I chose the latter option and have remained on the SVR. It's quite high but not as high as a BTL interest rate, so I have stayed put.

rich_b70

I've been thinking about this and I'm minded to let this ride for a while.

I could really do with a copy of the letter we received from the bank to clarify my thoughts - bad housekeeping on our behalf I guess - but my thoughts are that the letter we received and returned is not enforceable. I think it probably constitutes a side letter.

I am definitely of the opinion that there's no way the bank could come after us retrospectively.

Thanks all for your thoughts.

Thrugelmir

rich_b70 wrote: »

I am definitely of the opinion that there's no way the bank could come after us retrospectively.

Thanks all for your thoughts.

Retrospectively no. However you may receive little more than a months notice of a change. So best to be prepared.